Sunday, July 31, 2011

What Family?

Republicans, and sometimes others, are very fond of comparing the national debt and the budget problems to families. You know, they ask, why shouldn’t the government have to balance the budget just like families, or mom and pop do? Families, they often say, sit down at the kitchen table and work out their budgets that, according to those who use this analogy, are at least implied to be balanced.

I have no idea what family or families they have in mind. As I don’t travel with the top 2% of the wealthy, or a bunch of corporate CEO’s, most of the families I am familiar with are up to their knees, if not their eyeballs, or even over their heads in debt. When you consider that most families have mortgages, car and other payments, have somewhere in the vicinity of $14,000 of credit card debt, are often struggling mightily just to make ends meet, it doesn ‘t seem to me to be a very good analogy. Also reflect on the millions of foreclosures and bankruptcies that are occurring every year. I don’t believe families are balancing their budgets very well, if at all.

There is also the question of just what things are included in the family budget. It would appear that health insurance is not always included, especially given there are so many millions without health care. I know families who have fine houses, two or more vehicles, quite likely an ATV and perhaps even a boat or personal watercraft as well, two or more televisions, computers, cameras, iphones, and other gadgets, “living the good life.” They have no health or life insurance whatsoever, and little or no savings. What does this tell you about family budgeting? Other families around here where I live have one or more horses that need to be fed and cared for at considerable expense. These horses are used by many owners probably no more than very briefly once or twice a year. This is, in my opinion, much the same thing as most people who own yachts or power boats, moored probably 98% of the time, and rarely used, resting there as little more than symbols of affluence.

These are mostly the same people who buy prepared foods, frozen potatoes, canned beans, prepared meals that just have to be stuck in the microwave, and are far more expensive than buying the raw materials and cooking. Fast foods and convenience, the typical American family way with food and diet, is more expensive but easier. I even observe people on food stamps buying already prepared meals rather than buying spaghetti or beans or other raw materials and fixing their own meals that would be enormously less expensive and go a whole lot farther. You can argue, of course, this is not a matter of budgets per se, but, rather a question of priorities, but isn’t setting priorities what budgets are all about? Furthermore, when you consider the dozens, perhaps even hundreds, maybe even thousands of individuals and companies offering financial advice to families in debt and struggling, you have to assume this is a pretty common phenomenon in the United States.

It would appear to me the typical American family (if there is such a thing) is no more responsible budget-wise than the government. But it is a ridiculous analogy any case. How can you possibly compare the enormously more complicated budget of a nation of over 300 million people with that of a family of two to perhaps ten members, it’s absurd. This is especially true as it is impossible to maintain a balanced budget at all times because of the fact of wars, earthquakes, floods, tornadoes, hurricanes, droughts, fires, etc., etc. While the average family might have a small nest egg for emergencies (doubtful), a government with the responsibility for helping millions of families has no idea what may happen or how much money may be required. You could, of course, argue as some do, that government should not be responsible and people should just take care of themselves, an idea presumably abandoned about the time of the invention of fire (but ask Ron Paul and some of his Republican cronies).

Let’s face it, in the United States virtually no one, no person, family, household, government, whether local, state or federal (with perhaps some rare and remarkable exceptions) has lived within its means for decades, it’s just not the American way, what with American exceptionalism, credit cards, keeping up with the Jones’s, two cars in every garage, social climbing, conspicuous consumption, built-in-obsolescence, shop ‘til you drop, and having the most toys.